Two Chinese nationals and a New York woman pleaded guilty this week to money laundering charges as part of a major Chinese drug operation, according to the Justice Department.
Three others in the case also pleaded guilty in April as part of what the officials are calling “Operation Take Back America” – a nationwide anti-drug and illegal immigration crackdown.
The case provides some of the first public details on how Chinese nationals are working together with Mexican drug cartels in shipping into the U.S. the deadly fentanyl that has killed hundreds of thousands of Americans over the past several years.
The money laundering took bulk cash from drug trafficking and deposited the money in banks. The organization used couriers, covert bank-account holders, coordinators and foreign-based operatives, according to court papers in the case.
The Chinese nationals Fang Enhua, 38, and Lu Jianfei, 30, together with Zhen Shu Jun, 36 and a resident of Staten Island, were part of a major Chinese money-laundering operation that handled over $92 million in illicit drug proceeds, mainly from traffickers from Mexico, according to prosecutors.
Fang was identified as the leader of the six-member Chinese drug money laundering scheme involving a group of couriers who collected bulk proceeds from illegal activities, including drug money, from locations around the United States.
The couriers deposited the funds in amounts over $10,000 into shell company bank accounts controlled by the money laundering group.
“Fang used multiple cellphones, changing phone numbers regularly, and several encrypted messaging applications to communicate with the [Chinese money laundering operation’s] foreign-based operatives and U.S.-based drug traffickers,” the Justice Department said in announcing the guilty pleas Monday.
Fang admitted to laundering at least $90 million through banks in North Carolina between 2022 and her arrest in April 2024.
Lu admitted in a statement of facts that he laundered between $25 million and $65 million in drug proceeds.
Zhen stated in a court admission that she acted as a courier for the organization and used false identification in depositing hundreds of thousands of dollars in drug money.
The Justice Department said Fang “admitted that she knew funds laundered in the conspiracy included drug trafficking proceeds or funds intended to promote drug trafficking.”
Fang and Zhen each pleaded guilty to one count of money laundering conspiracy, one count of money laundering to conceal the nature, location, source, ownership, and control of the illicit proceeds, and one count of monetary transaction involving criminally derived property greater than $10,000.
Lu pleaded guilty to one count of money laundering conspiracy, two counts of money laundering to conceal the nature, location, source, ownership, and control of the illicit proceeds, and two counts of monetary transaction involving criminally derived property greater than $10,000.
The defendants face a maximum penalty of 20 years in prison on each of the conspiracy and money laundering counts and a maximum of 10 years in prison on each of the monetary transaction counts.
A federal district court judge in the Western District of North Carolina will determine their respective sentences after considering the U.S. Sentencing Guidelines and other statutory factors.
No sentencing date had been set as of Tuesday afternoon.
Three other members of the group, Chinese nationals Xia Maoxuan, 29, and Yu Zhou, 42, and Lin Shao Neng, 58, of Baldwin Park, California, pleaded guilty to conspiracy and money laundering charges in April.
The Justice Department said the “particularly prolific cell within the [Chinese money laundering organization] has been completely dismantled.”
Operation Take Back America is focused on using law enforcement resources to “repel the invasion of illegal immigration, achieve the total elimination of cartels and transnational criminal organizations, and protect our communities from the perpetrators of violent crime.”
The case highlights what an open-source intelligence report describes as the Chinese Communist Party’s use of asymmetric warfare against the United States.
“American leaders and national security agencies face an exponentially increasing number of geographically distributed, networked, and highly adaptive Mexico-based threat groups that are actively engaged in covert biochemical weapons operations against the United States with [Chinese Communist Party] strategic sponsorship and enablement,” the report said.
“These groups operate seamlessly across national borders and generate often-fragmented, disparate data trails behind them in faint signal form. The essential inputs and enablers of precursor chemicals, pharmaceutical-grade pill grade manufacturing facilities and international money laundering capabilities for these cartels are provided by the CCP.”
The report states that fentanyl-laced heroin is highly likely to kill or severely debilitate a user, thus raising questions about whether the drug trade is purely commercial or whether it is intended to weaken what Beijing regards as its main adversary.
The report, “Covert Biochemical Weapons Operations Conducted by the Chinese Communist Party Against the United States Via Mexican Cartels,” stated that the CCP has designed, implemented and exerts strategic-level control over a threat network structure that originates in Mexico and spans across the United States.
The network is used to move synthetic narcotics and launder illicit capital.
